Monthly car rental and car-sharing companies are popping up across Asia, offering youths a new way to get access to a car without having to actually own it. And it's not just basic cars, these companies are also offering Teslas and other electric models, as well as traditionally-fuelled high-end options. The trend of car sharing and subscriptions has been on the rise since the pandemic, but now there's an increasing number of companies - from major automakers to startups - investing in the Asian industry.
In Singapore, the subscription trend has taken off in a big way. Several companies have emerged over the last few years, offering a variety of car services. Some companies, such as Tribecar and Carzuno are offering long-term rental options, starting at six months. Both offer a range of car options, from basic Nissans and Mazdas to high-end sports and electric car models. Carzuno is the brainchild of former Uber and Grab executive Amrt Sagar and Hertz employee Andrew Chan, who are using their automotive industry know-how to develop a new type of car service.
Several companies are offering their cars for a variety of periods, from pay per use to hourly to weekly and monthly. Some offer monthly subscriptions, allowing users to use a car for 'free' for two hours a day with a booking - much in the same way as people access city bikes. GetGo, in comparison, has a fleet of 1,000 cars offering users the use of a car for the time and mileage used, rather than a monthly fee. In 2021, it had over 100,000 verified users on its app.
The subscription firm BlueEG focuses solely on electric vehicles (EVs). In November 2021, Singapore's Goldbell Group purchased the firm, with plans to invest $29.6 million by 2023. With a monthly subscription, the company allows customers to drive an EV and drop it off at a charging point at their destination, rather than having to return it to the original point.
Singapore is not the only Asian country to be increasing its car subscription market. In Japan, the popularity of car subscriptions is on the rise among the youth population. Toyota is offering users 32 vehicle options through its Kinto Corp service. It offers a three, five and seven-year subscription option that includes taxes, insurance, and maintenance, attracting young people that aren't looking to make the long-term investment in car ownership. It also takes away the concern of high insurance premiums for young drivers. In spring 2021, Kinto had almost 17,000 subscribers with around 1,000 new applications each month, 60% of which are drivers under the age of 30. Honda, Nissan, and Mitsubishi have all also recently launched subscription options. Media sources point to Covid as the impetus for greater interest in these types of services as people have been less willing to use public transport during the pandemic.
Meanwhile, in Korea, car subscription services are attracting users in their 30s and 40s, as major Korean car companies Kia and Hyundai offer new services. Hyundai launched its subscription option in 2019, giving users nine cars to choose from. Customers value easy access to a car through the use of an app for booking their timeslot without having to think about the implications of actually owning a car, such as maintenance costs. Hyundai recently expanded its subscription network to Busan, the country's second-largest city.
An official from Hyundai Motor explained, "To a manufacturer, car subscription service is a new channel to promote new products because users' satisfactory experience from the mobility subscription service can lead to actual purchases."
In fact, car sharing has been on the rise worldwide in recent years. The development of mobile apps has supported the rise of car subscriptions substantially, as users can now see the availability of cars in their area and book their car usage easily through their phones.
In the U.S., Getaround, which was established over a decade ago, has seen growing interest in its services following the pandemic. CEO of the firm, Karim Bousta stated last spring, "As the most recent round of lockdowns has begun to subside, Getaround has already seen a 40% increase in weekly revenue since February."
As for Asia, research by McKinsey & Company suggests that there is huge potential in the market, with a survey showing that 55 percent of Chinese consumers say they were open to using rental options rather than purchasing their cars. Although not everyone is so optimistic about the future of car sharing, some transport experts in Singapore believe demand that rose during the pandemic is likely to taper off.
As car-sharing and subscription services grow in the wake of the pandemic, several countries across Asia are offering a variety of different car services, from one-off rentals to monthly and yearly subscriptions. Letting users check availability and book timeslots using an app has made for easy access and growing popularity among youth populations. It offers an alternative to owning a car as well as allowing people to avoid using public transport during the pandemic. However, some worry that this growing trend is strongly linked to the current global health situation and may not be as long-lasting as investors hope.
By Felicity Bradstock for Oilprice.com
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Felicity Bradstock is a freelance writer specialising in Energy and Finance. She has a Master’s in International Development from the University of Birmingham, UK. More
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